The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 was passed by the House of Representatives today without amendment. It now moves to the Senate.

As detailed in our previous tax alert the amnesty will enable employers who unwittingly short-paid superannuation, including on annual leave loading, to make disclosure with the following concessions:

  • Removal of the $20 per employee per quarter administration charge
  • Making the payment of superannuation guarantee charge income tax-deductible

The Super Guarantee (SG) amnesty will run for six months after the day the Bill receives royal assent and it will apply to SG shortfalls up until the quarter ending March 2018. Under the amnesty, employers would be able to self-correct SG underpayments without incurring additional penalties that would normally apply. This includes the removal of the imposition of Part 7 Penalties (of up to 200% of the liability).

The amnesty does not remove the need to pay 10% interest on the shortfall amounts, as this is not a penalty as such, but is designed to compensate the employee for lost earnings.

What do you need to do?

If you have previously lodged a superannuation guarantee charge disclosure and been charged the administration fee, you should ask the ATO for a refund, noting that this may not be possible until the new law receives royal assent.

If you have superannuation shortfalls to declare, ensure this is done within the six month period after royal assent. In our experience, the work to put disclosures together can be more extensive than first anticipated, as there are a number of different aspects and complexities to take into account. We suggest acting on this sooner rather than later to maximize the opportunity to lodge within the six month amnesty period.